Long Term Disability Deadlines, Limitation Periods and Wiles v. Sun Life, 2018 ONSC 1090

On December 6, 2017, the Honourable Justice G.E. Taylor of the Ontario Superior Court of Justice granted Summary Judgment to Sun Life, dismissing the claim for long term disability benefits of Tina Wiles.

Relevant Timeline In Wiles V. Sun Life Case:

  • October 2015 – Ms. Wiles becomes totally disabled;
  • Wiles was employed at Spaenaur Inc. until November 3rd, 2015 – employment terminated without cause;
  • Claim for Salary Continuance on basis of disability was made shortly thereafter;
  • End of elimination period + 90 days – July 31st, 2016
  • January 2017 – lawsuit commenced against Sun Life for salary continuance (self-funded by employer) and LTD benefits insured by Sun Life;
  • May 10, 2017 – Sun Life issued Notice of Motion for Summary Judgment;
  • One year from LTD application deadline – July 31st, 2017
  • September 28, 2017 – Order made on consent allowing claim to be amended to add employer as a defendant
  • Wiles granted leave to Reply to the claim by pleading relief from forfeiture

A more detailed chronology can be found in the reported decision. In addition to the chronology set out above, the decision sets out the fact that no claim for LTD benefits was ever submitted, although Sun Life did administer the salary continuance plan for the employer and was therefore aware that Ms. Wiles was claiming total disability. The formal claim for LTD benefits against Sun Life did not arise until, at the earliest, the Statement of Claim was originally filed in January 2017, or later when the claim was specifically amended.

Failure To Submit Formal Application Within Time Frame

Ms. Wiles claim for relief from forfeiture stems from her failure to submit a formal application for LTD benefits within the time stipulated under the policy (within 90 days after the elimination period). Justice Taylor then proceeds to tie this failure to the failure to commence a lawsuit for the LTD benefits within 1 year of the deadline for submitting the LTD application (July 31, 2017). His decision states that only when the claim was amended on September 28, 2017 was it clear that Ms. Wiles was making a claim for LTD benefits. He refers to vague references regarding breaches of a policy of insurance in the claim filed in January, 2017, but does not find this to be sufficient to have commenced the lawsuit within the one year of the contractual limitation period contained in the Sun Life policy.

Mr. Justice Taylor provides analysis as to why the conduct of Ms. Wiles does not qualify for relief from forfeiture and summarizes the criteria initially without reference to the contractual limitation period, however, one is left to wonder whether the imperfect compliance would have been sufficient in the absence of Ms. Wiles perceived failure to commence legal action within the one-year contractual limitation period.

Canadian Should Pay Close Attention To Deadlines

This decision is troubling on several counts, and in particular drives home the point that the twists and turns of compliance with insurance policy requirements are a minefield for the unwary and unfamiliar, as most people are not dealing with such matters on a day-to-day basis. Making assumptions about deadlines within insurance policies is a risky business. Canadians making disability claims should pay close attention to deadlines in their insurance policies, and where unsure, seek legal advice as soon as possible.

As of the time of writing, the decision is being appealed to the Ontario Court of Appeal, where hopefully submissions with respect to the Statutory Limitation Period (2 years under the Limitations Act) will be raised, as Justice Taylor made no reference to the statutory limitation period in his decision. The Ontario Court of Appeal’s decision in Kassburg v. Sun Life, 2014 ONCA 922, suggests that the 2-year limitation period ought to have been applied as opposed to the one-year contractual limitation period applied in the Wiles case. In fact, the Court of Appeal rejected the notion that the contractual limitation period could take advantage of the business exception contained in the Limitation Act. Presumably, the Court of Appeal will be asked to re-examine the events to determine whether imperfect compliance was sufficient where there is apparently no issue with respect to the limitation period.

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